CH 1.1 Basic Consepts
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Questions and Answers

Which branch of economics deals with the role of money in the economy?

  • Developmental Economics
  • Monetary Economics (correct)
  • Environmental Economics
  • Labour Economics

    • What approach does an economist use to develop hypotheses based on existing theories and test them against empirical data?

  • Inductive reasoning
  • Positive economics
  • Normative economics
  • Deductive reasoning (correct)

    • What is the primary purpose of economic models?

  • To conduct investigations
  • To make value judgments on economic phenomena
  • To formulate questions
  • To predict and understand the interactions and outcomes of economic actions (correct)

    • Which of the following is an example of normative economics?

    <p>A policy recommendation to reduce poverty</p> Signup and view all the answers

    What is a major challenge in economic research?

    <p>Maintaining all variables constant except one</p> Signup and view all the answers

    What is the term for the scientific approach used in economics?

    <p>The Scientific Method</p> Signup and view all the answers

    Which branch of economics focuses on international trade and finance?

    <p>International Economics</p> Signup and view all the answers

    What is the term for the part of economics that examines the economic activities of government?

    <p>Public Sector Economics</p> Signup and view all the answers

    Which of the following is NOT a step in the scientific method used in economics?

    <p>Making value judgments</p> Signup and view all the answers

    What is the term for the branch of economics that studies the policies that promote economic development in less developed countries?

    <p>Developmental Economics</p> Signup and view all the answers

    What is the primary focus of the social science of economics?

    <p>The study of how individuals, businesses, governments, and other organizations make decisions to allocate scarce resources</p> Signup and view all the answers

    What is the core challenge in economics?

    <p>Scarcity</p> Signup and view all the answers

    What is the primary economic question of deciding which goods and services should be produced?

    <p>What to produce?</p> Signup and view all the answers

    What branch of economics focuses on the overall functioning of an economy?

    <p>Macroeconomics</p> Signup and view all the answers

    What is the result of the dichotomy between infinite desires and finite means?

    <p>The economic problem of how to distribute resources efficiently</p> Signup and view all the answers

    What is the role of individuals, governments, and societies in economics?

    <p>To make decisions about resource allocation</p> Signup and view all the answers

    What is the primary focus of microeconomics?

    <p>The decisions of individuals and firms</p> Signup and view all the answers

    What is the primary economic question of deciding who will receive the products and services created?

    <p>For whom to produce?</p> Signup and view all the answers

    What is the result of the continuous decision-making process in economics?

    <p>The efficient allocation of resources</p> Signup and view all the answers

    What is the primary goal of economics?

    <p>To distribute resources efficiently</p> Signup and view all the answers

    What is the fundamental reason behind the economic problem?

    <p>Finite resources</p> Signup and view all the answers

    What is the primary focus of microeconomics?

    <p>The decisions of individuals and firms</p> Signup and view all the answers

    Which of the following is NOT a primary economic question?

    <p>At what price to sell?</p> Signup and view all the answers

    What is the result of the continuous decision-making process in economics?

    <p>Inefficient allocation of resources</p> Signup and view all the answers

    What is the main objective of economics?

    <p>To distribute limited resources efficiently</p> Signup and view all the answers

    What is the relationship between human wants and resources?

    <p>Human wants are unlimited, and resources are finite</p> Signup and view all the answers

    What is the primary focus of macroeconomics?

    <p>The overall functioning of an economy</p> Signup and view all the answers

    What is the main challenge in making decisions about resource allocation?

    <p>Scarcity of resources</p> Signup and view all the answers

    What is the primary goal of individuals, governments, and societies in economics?

    <p>To allocate limited resources efficiently</p> Signup and view all the answers

    What is the primary reason for the existence of the economic problem?

    <p>Finite resources and unlimited human wants</p> Signup and view all the answers

    What is the primary focus of Labour Economics?

    <p>The supply and demand for labour and its effects on wage levels and employment</p> Signup and view all the answers

    What is the main difference between positive and normative economics?

    <p>Positive economics is descriptive, while normative economics is prescriptive</p> Signup and view all the answers

    What is the main challenge in economic research?

    <p>The unpredictable nature of human behaviour</p> Signup and view all the answers

    What is the purpose of economic models?

    <p>To help understand and predict the interactions and outcomes of economic actions</p> Signup and view all the answers

    What is the approach used in economics that involves developing hypotheses based on existing theories and testing them against empirical data?

    <p>Deductive reasoning</p> Signup and view all the answers

    What is the primary focus of Environmental Economics?

    <p>The economic issues with environmental implications</p> Signup and view all the answers

    What is the main difference between inductive and deductive reasoning?

    <p>Inductive reasoning involves observing data to develop new theories, while deductive reasoning involves developing hypotheses based on existing theories</p> Signup and view all the answers

    What is the primary focus of International Economics?

    <p>International trade and finance</p> Signup and view all the answers

    What is the main goal of the scientific method in economics?

    <p>To understand and predict economic phenomena</p> Signup and view all the answers

    What is the primary focus of Developmental Economics?

    <p>The policies that promote economic development in less developed countries</p> Signup and view all the answers

    What is the underlying assumption that drives the discipline of economics?

    <p>Resources are finite</p> Signup and view all the answers

    Which economic question deals with the allocation of resources based on the available financial capacities?

    <p>What to produce?</p> Signup and view all the answers

    What is the primary focus of microeconomics?

    <p>Analyzing the decisions of individuals and firms</p> Signup and view all the answers

    What is the fundamental economic problem that arises due to the discrepancy between human wants and resources?

    <p>Resource allocation</p> Signup and view all the answers

    Which branch of economics addresses broad issues like unemployment, inflation, and economic growth?

    <p>Macroeconomics</p> Signup and view all the answers

    What is the primary goal of individuals, governments, and societies in economics?

    <p>Satisfying unlimited wants and needs</p> Signup and view all the answers

    What is the result of the continuous decision-making process in economics?

    <p>Resource allocation</p> Signup and view all the answers

    What is the primary challenge in making decisions about resource allocation?

    <p>Balancing competing needs</p> Signup and view all the answers

    What is the relationship between human wants and resources?

    <p>Wants are unlimited, resources are finite</p> Signup and view all the answers

    What is the core concept that necessitates choices about resource allocation?

    <p>Scarcity</p> Signup and view all the answers

    What is the primary role of economic models in economics?

    <p>To test hypotheses and make economic predictions</p> Signup and view all the answers

    Which of the following is a characteristic of normative economics?

    <p>It involves value judgments and subjective perspectives</p> Signup and view all the answers

    What is the primary challenge in conducting economic research?

    <p>The difficulty in maintaining controlled experiments</p> Signup and view all the answers

    Which of the following is a step in the scientific method used in economics?

    <p>Formulating a question and then conducting investigations</p> Signup and view all the answers

    What is the primary difference between deductive and inductive reasoning in economics?

    <p>Deductive reasoning involves developing hypotheses based on existing theories and testing them against empirical data</p> Signup and view all the answers

    Which branch of economics focuses on the economic activities of government?

    <p>Public Sector Economics</p> Signup and view all the answers

    What is the primary goal of economics as a social science?

    <p>To understand and predict economic phenomena</p> Signup and view all the answers

    Which of the following is NOT a characteristic of positive economics?

    <p>It involves value judgments and subjective perspectives</p> Signup and view all the answers

    What is the primary role of economists in understanding economic phenomena?

    <p>To develop hypotheses based on existing theories and test them against empirical data</p> Signup and view all the answers

    Which of the following is a challenge in testing hypotheses in economics?

    <p>Maintaining controlled experiments</p> Signup and view all the answers

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